GAMBLING LAWS IN INDIA

Gambling Laws In India : The global trend is rapidly shifting towards a more lenient stance on ‘skill-based’ games, while Indian legislation about gambling and
online gaming remains outdated or lacking. The Indian government has not yet introduced specific regulations for gambling,
and no comprehensive legal framework has been established in recent years.

As the timeless debate over the legality of various forms of gambling persists, one thing remains clear: gambling holds a significant appeal for Indians.
A report from the International Centre for Sports Security (ICSS) suggests that the betting market in India could exceed a staggering
US$130 billion. Once you’ve familiarized yourself with the Gambling Laws In India, consider placing a bet with any of the featured bookmakers below!

Gambling Laws In India

IS GAMBLING LEGAL IN INDIA?

Answering this question poses a challenge due to the ambiguous stance of the Indian government on gambling and betting.
While certain sports enjoy full endorsement from authorities, others with similar attributes face outright rejection.
Horse racing and Rummy are classified as skill-based games and are therefore permissible for betting,
whereas cricket and poker lack this distinction in the eyes of Indian legislators.

Poker resides within a significant legal grey zone in Indian legislation. It’s intriguing that games like Teen Patti (flush)
and Texas Hold ’em face prohibition, whereas Rummy remains permissible. Equally fascinating is the legality of horse racing,
a sport prone to manipulation. It is sanctioned for betting due to its classification as a skill-based game, while cricket betting,
which demands a comparable skill set, remains banned. The era of matka gambling and similar activities in India has come to an end.

Currently, betting options are limited to select sports and games, often confined to specific states. Currently, horse racing, online poker,
online Rummy, lottery, and a handful of casinos are sanctioned in India. Comprehending the complex legal positions of each state
regarding these activities requires time and patience from the reader. Today, we endeavor to tackle these multifaceted issues.

WHY ARE THERE DIFFERENT GAMBLING LAWS IN INDIA?

Are you curious as to why each state in India has its own unique set of gambling laws?
Understanding the reasoning behind this can help shed light on the complexities of India’s legal system and the various cultural
and religious factors that come into play. By delving deeper into the nuances of state gambling laws,
we can gain a greater appreciation for the diversity and richness of India’s many regional traditions and customs.

Observing the situation, it’s apparent that gambling laws vary among states despite the presence of centralized Acts.
Thus, what accounts for the divergence in gambling/betting regulations across different states?

The explanation lies within the Seventh Schedule of the Indian Constitution, which explicitly grants states the authority to legislate
and formulate policies concerning ‘gambling and betting.’ This is evident in Entry 34 of List II, where states can legalize gambling at their discretion.

Each state government has the autonomy to enact and regulate gambling laws according to its discretion.
Additionally, the Central Government cannot interfere in individual states’ proceedings.

Currently, the majority of Indian states have legislation prohibiting gambling, while 13 states have legalized lotteries, and two states,
namely Goa and Sikkim, have legalized various other forms of gambling. Given India’s diversity and 29 distinct states,
one can only envision the range of differences in gambling regulations.

LETS LOOK AT A FEW STATE EXAMPLES:

LEGAL CASINO GAMBLING IN GOA

Goa has enacted two amendments to the Goa, Daman, and Diu Public Gambling Act, 1976,
to legalize specific forms of gambling. Below is the relevant section from the Act:

26[13A. Authorized Game.– (1) Regardless of any provision within this Act, the Government reserves the right to approve electronic
amusement/slot machines in Five Star Hotels 27 {as well as table games and gaming on board vessels offshore,
as may be notified}, contingent upon specified conditions and payment of prescribed recurring and non-recurring fees.

27 Inserted by Amendment Act 13 of 1996.
As of October 2011, Goa has seven land-based and numerous offshore casinos operating legally.

LEGAL GAMBLING IN SIKKIM

Sikkim is another Indian state that has legalized gambling.

1) Under the Sikkim Casino Games (Control and Tax Rules), 2002, the Sikkim Government can issue licenses to individuals
and businesses seeking to operate casinos.

2) The Sikkim Regulation of Gambling (Amendment) Act, 2005, empowers the Sikkim Government to permit gambling
on designated days and to legalize specific gambling establishments at their discretion through licensing.

Sikkim made history by becoming the first Indian state to legalize internet gambling.

The Sikkim government has started accepting applications for licensing online gambling platforms, provided their servers are within the state.

This includes casino gambling, lottery, and sports betting.
Many believe that once these licensed sports betting sites come online, players in states with no gambling laws
will be able to use them legally. This has caused popular online gambling sites such as William Hill and Betfair
to eye India as the next primary market to expand to.

This, however, has a significant challenge – foreign investments involving gambling are illegal under Indian law.

GAMBLING LAWS AND BETTING ACTS IN INDIA

Although gambling remains ambiguous in its legality in India, numerous legislations govern its practice. Let’s examine some of the key ones closely. Here are a few examples:

  • The Public Gambling Act, 1867
  • Payment and Settlement Act, 2007
  • Assam Gaming and Betting Act, 1970
  • Bombay Prevention of Gambling Act, 1887
  • Goa, Daman, and Diu Public Gambling Act, 1976
  • Karnataka Police Act, 1963
  • Madhya Pradesh (C.P.) Public Gambling Act,1867
  • Madhya Bharat Gambling Act, 1949
  • Orissa Prevention of Gambling Act, 1955
  • Public Gambling Act, 1867 Constitution of India, Seventh Schedule, List II, Entry No. 34
  • Punjab Public Gambling Act, 1867
  • Sikkim Online Gaming (Regulation) Act, 2008
  • Tamil Nadu City Police Gaming Rules, 1949
  • Tamil Nadu Gaming Act, 1930
  • The Andhra Pradesh Gaming Act, 1974
  • The Andhra Pradesh Gaming Rules, 1976
  • The Delhi Public Gambling Act, 1955
  • The J. & K. Public Gambling Act, 1977
  • The Kerala Gambling Act, 1960
  • The Meghalaya Prevention of Gambling Act, 1970
  • The Pondicherry Gaming Act, 1965
  • The Rajasthan Public Gambling Ordinance, 1949
  • The West Bengal Gambling and Prize Competitions Act, 1957
  • The West Bengal Gambling Rules, 1958
  • Uttar Pradesh Public Gambling Act,1961

THE PUBLIC GAMBLING ACT, 1867

The Public Gambling Act is the primary legal framework contributing to the ‘grey’ area of gambling in India.
Enacted during British rule, this 145-year-old law criminalizes various activities related to gambling, including operating or assisting
in operating a gambling establishment, visiting such establishments, financing gambling, and possessing gambling devices.
Violating this law may lead to a fine of up to 200 rupees or imprisonment for up to three months.

The Public Gambling Act explicitly mentions that it does not apply to games solely based on skill, regardless of where they are played.
This provision implies that betting on games primarily reliant on skill is permissible, irrespective of other laws.
Competitions heavily dependent upon skill are not considered gambling, even if they involve an element of chance;
if a game predominantly relies on skill, it qualifies as a game of “mere skill.”

PAYMENT AND SETTLEMENT ACT, 2007

Madame President Patil endorsed the Payment and Settlement Systems Act, 2007, on December 20, 2007,
which became effective on August 12, 2008. This legislation grants the Reserve Bank of India
(RBI) the power to oversee all electronic payment systems. Section 4 is pivotal, stating in part:

Operating a payment system without authorization is prohibited.
Only the Reserve Bank is authorized to commence or use such systems by the provisions of this Act.

The Act further stipulates that any payment system or clearing house with less than 51% equity held by an Indian bank
must obtain authorization to operate in India. Like other sections within this 14-page Act, it grants extensive
authority to the RBI over all facets of payment processing in India. This includes the rights to conduct inspections
with or without prior notice and access all financial and customer data upon request.

The most crucial aspect here is that the RBI has the authority to promptly formulate policies concerning
all aspects of payment processing, as permitted by this Act. The RBI has utilized this authority on multiple occasions.

This led to the PayPal controversy in India, prompting Neteller to cease issuing Neteller Plus cards.
Entropay will halt the issuance of Plastic MasterCard-branded debit cards. The RBI has complete authority to direct banks to reject
or decline any payments or deposits involving specific payment processors, e-wallets, or clearinghouses.

While their focus appears to be primarily on pursuing businesses and freelancers suspected of tax evasion, the legal framework and
authority to target gambling processors already exist should they choose to do so in the future.
However, at present, this is not a priority for them.

INFORMATION TECHNOLOGY ACT, 2000

On April 14, 2011, the Gazette of India released the Information Technology (Intermediaries Guidelines) Rules, 2011.
This regulatory document is issued under the authority granted by the Information Technology Act of 2000.
In essence, this Act directs Internet Service Providers and Website Hosts to restrict access to specific types of websites and content.

While a significant portion of these regulations pertains to national security and content deemed inappropriate for India,
including profane, illegal, or pornographic material, Section 2, item B also covers content related to or promoting money laundering or gambling.
The inclusion of gambling in the IT Act of 2000 contradicts the direction in which much of India is moving.
Notably, the Sikkim Government has legalized sports betting and casino gambling, Goa has legal casinos, and 13 states have legalized lotteries.

Even Mr. Haroon Lorgat, CEO of the International Cricket Council (ICC), has advocated for legalizing cricket betting sites in India,
believing it to be the most effective means of combating corruption and match-fixing. Despite the growing momentum for legal
gambling in India and some progress being made, the Central Government continues to take measures to impede its proliferation.

Presently, most forms of gambling in India are illegal. However, legal options exist for horse racing, lotteries, and rummy (paplu).
Additionally, numerous betting sites legally operating in the UK cater to Indian players with minimal hurdles. At this juncture, it
appears that Indian law is more focused on dissuading Indian players from gambling rather than preventing it altogether.
It seems highly probable that fully legalized gambling will eventually arrive in India, although the timeline for this development remains uncertain.

IN INDIA, GAMBLING LAWS ALLOW FOR SKILLED GAMES TO BE LEGAL.

While a notable portion of betting occurs legally through horse racing and lottery, a significant sum is wagered
on cricket and other sports through illicit or ‘technically illegal’ means. In this article, I will delve into the intricate
landscape of Indian gambling laws, exploring the prohibited forms of gambling, those explicitly permitted, and the lingering grey areas.

IS BETTING ON RUMMY LEGAL IN INDIA?

In 1968, Rummy (also referred to as Paplu) was classified as a game of skill:
“Rummy necessitates a degree of skill as players must memorize the fall of cards and employ strategy in building their hands.
Hence, it cannot be solely considered a game of chance. Rummy predominantly involves skill, similar to the strategic aspects of bridge.”

IS LOTTERY LEGAL IN INDIA UNDER GAMBLING LAWS?

The Central Lotteries (Regulation) Act of 1998 granted state governments the power to conduct lotteries but limited them to a
maximum of one draw per week. However, today, lottery terminals are widely accessible in most Indian states,
with some lotteries being drawn every 15 minutes.

Additionally, the PlayWin Lotto, licensed in Sikkim, enjoys significant popularity, allowing Indians from any state to purchase tickets
either online or through terminals. The deviation from the one-draw-per-week rule is largely due
to the belief of most states that they possess the inherent authority to enact their laws regarding all forms of gambling
without relying on the Central Lotteries Act. This authority is conferred upon them by the Constitution of India.
It is noteworthy that despite its simplicity as a form of lottery, Satta Matka gambling is strictly prohibited.

IS ONLINE CRICKET BETTING LEGAL IN INDIA?

While no specific gambling laws in India strictly prohibit Indians from betting on cricket, the federal government does not categorize
betting on the sport as a game of skill akin to horse racing. The intersection of IPL and
cricket betting presents a paradox in gambling. According to a report by the All India Gaming Federation,
illegal betting on cricket results in the Indian exchequer losing nearly INR 2 Lakh Crore annually.
Industry estimates suggest that approximately 50 million USD is wagered by Indian online bettors on each IPL match.

Critical Events in the History of Cricket Gambling Laws in India

Following the 2013 IPL match-fixing scandal, the Lodha Commission, appointed by the Supreme Court, examined the potential
legalization of cricket betting. In July 2015, the Patiala High Court acquitted all 36 individuals in the Spot-fixing scandal.
Judge Neena Badal ruled that cricket betting is not illegal, precluding any action against those involved in betting on cricket matches.

Subsequently, in August 2017, the Delhi Police appealed against the discharge order. Additionally,
a division bench of the Supreme Court issued an order in 2016 suggesting that the legalization of betting be considered
through the enactment of appropriate legislation, subject to examination by the Law Commission and the Government.

In June 2018, the Law Commission submitted a recommendation to the government advocating for the legalization of betting in India
under strict supervision to combat money laundering. The Commission argued that since banning cricket betting in India
is nearly impossible, regulating it under stringent laws is a pragmatic approach.

The law commission proposed that the government has the authority, under Articles 249 or 252 of the constitution,
to formulate laws for regulating gambling. If legislation is enacted under Article 252, non-consenting states would have the option
to adopt them. This approach could expedite the process, circumventing years of bureaucratic hurdles.
While there are indications that India is leaning towards legalizing cricket betting, the timing of the government’s definitive decision remains uncertain.

IS HORSE RACING BETTING LEGAL IN INDIA?

In India, horse racing and gambling are closely linked. It is one of the few sports where gambling is allowed
and regulated by clear laws. However, the legality of horse race gambling has faced numerous challenges in lower courts
and the Supreme Court. As mentioned, states can adopt the Central Public Gaming Act of 1867 or create gaming laws and regulations.

Provisions in State Gaming Acts

At present, eight states have enacted legislation specifically legalizing betting on horse racing. These states include Delhi,
Maharashtra, West Bengal, Karnataka, Andhra Pradesh, Tamil Nadu, and Meghalaya, where licensed racecourses permit such betting.

The Bombay Race Courses Licensing Act, 1912 (Maharashtra), and the West Bengal Gambling Rules,
1958 (West Bengal) are examples of state-enacted Acts that facilitate betting on horse racing.

Supreme Court Rulings on Horse Racing Betting

In the significant case of Dr. KR Lakshmanan v. State of Tamil Nadu, a three-judge bench of the Supreme Court of India
delivered a favorable verdict regarding the legality of betting on horse racing. In this landmark ruling, the Supreme Court
unequivocally declared horse racing as a game of skill rather than chance, thus affirming its legality for betting purposes.

However, while this ruling is a positive development for horse racing enthusiasts, it highlights the disparity in legal treatment
among other sports, such as poker, cricket, fantasy sports, blackjack, and rummy,
which also rely heavily on skill rather than luck and warrant similar legal recognition.

Regulatory Authorities on Horse Racing in India

In India, the Turf Authority serves as the principal regulatory body for horse racing.
Several racecourses operate as independent entities, each with its own governing bodies and membership criteria.
Here are the names of various racecourses in India:

  1. Delhi Race Club in Delhi
  2. Mysore Race Club in Mysore
  3. Royal Calcutta Turf Club in Kolkatta
  4. Royal Western India Turf Club racing in Mumbai and Pune
  5. Madras Race Club racing in Chennai
  6. Bangalore Turf Club Ltd in Bengaluru
  7. Hyderabad Turf Club in Hyderabad
See More

Major Races in India

In India, there are five main ‘Classic’ horse races: the Indian 1000 Guineas, the Indian 2000 Guineas, the Indian Oaks,
the Indian Derby, and the Indian St. Leger. Additionally, there is the Bangalore Derby and the Invitation Cup,
which alternates between turf authorities and features events like the Sprinter, Stayer, and Super Mile races.

Taxation Policy of Horse Racing

Given the widespread popularity of horse racing in India and the established legal framework governing betting on horse racing,
the government has included provisions for income generated from horse races in the Income Tax Act of 1961.
According to Section 115BB of the Income Tax Act 1961, a flat 30% tax is levied on winnings from
all forms of betting, including horse racing, lotteries, and other wagering activities. Additionally,
Section 194BB of the Income Tax Act 1961 mandates that all licensed bookmakers at registered racecourses deduct
a 30% tax at source on winnings exceeding INR 5,000. While Indian society largely prohibits and criminalizes most forms of
gambling, the government’s stance on horse racing is clear. Betting on horse races and participating in lotteries is generally
legal in India. Although some state legislations have banned horse racing and lotteries entirely, certain states have licensed
racecourses and bookmakers. Moreover, there are racecourses that permit remote betting.

INTERNATIONAL GAMING SITES USED BY INDIAN PLAYERS

Internet gambling operates on a global scale, transcending borders and jurisdictions. While the Central Government lacks jurisdiction
over UK-licensed bookmakers operating legally under European and International Law, it has implemented measures
aimed at impeding access to these sites. However, these measures have proven largely ineffective.
For instance, Betway, a Malta-based company, caters to a global customer base. Its betting platform is accessible in multiple
languages and currencies, including the Indian Rupee (INR). International gambling sites like Betway are not directly subject to
Indian laws as they hold legal gambling licenses in other jurisdictions. Without servers, advertising, or other operations in India,
authorities have limited means to prevent them from serving Indian customers. Consequently, Indian users find it convenient to
utilize e-wallets and place bets on events such as IPL cricket via platforms like Betway and 10Cric.